Within the confines of our everyday lives, we can observe the vast economic inefficiencies of our systems, which ultimately lead to trillions of dollars in costs, as mentioned in the previous article. Perhaps no other daily occurrence illustrates this inefficiency more clearly — or more widely — than the empty space economy. According to Forbes Insights, at least 25% of the volume of everything shipped around the world is simply air. The European Union has found that at least one-third of all truck cargo transports consist entirely of empty space.
This aligns with countless anecdotal reports worldwide of people receiving half-empty boxes. Within my personal network, when I asked whether they had experienced this phenomenon, only one person denied ever seeing a half-empty box — simply because he doesn’t order anything online. Yet, even this person has almost certainly consumed products transported in half-empty trucks or containers.
So, why does this matter? The core issue is that these are clear, measurable examples of systemic inefficiency — inefficiencies that should not exist, given that the driving force behind globalization is to increase production efficiency and, consequently, consumption. While this principle holds in simplified economic models, reality tells a very different story.
And it’s not only the externalities!
It is common to argue that issues like gas emissions, pollution, and nuclear waste are externalities — costs that affect third parties who are neither suppliers nor consumers of a specific market. For instance, if a factory in the global supply chain for jeans pollutes the water of a remote town that doesn’t consume the product, these costs are excluded from the corporation’s accounting, as they are not considered an impact on the company’s performance. This creates the illusion that, while some costs are unaccounted for, the market itself remains efficient; or, for some, that inefficiencies are merely temporary and will naturally correct over time.
While this notion is debatable, let’s set aside externalities for now, acknowledging their negative societal impact, and focus solely on the direct costs incurred by both consumers and producers. Let’s also strip away any moral arguments and fully embrace the lens of profit maximization to test whether logistics markets, particularly in the context of the empty space economy, can truly be considered efficient even without factoring in externalities.
Under these conditions, sending half-empty packages has direct impacts on corporations, which can be divided into benefits and costs. Without access to detailed public data or insider insights from logistics managers and operators, we can only make informed guesses about the perceived benefits. These likely include time savings and lower per-unit costs of mass-produced, standardized boxes. For example, producing billions of identical boxes might lower the unit cost from 50 cents to just 5 cents, with standardization streamlining packaging processes. The global logistics infrastructure follows a similar logic: using standardized measurements, practices, and shipping units like TEUs (twenty-foot equivalent units) reduces hardware costs and helps optimize logistics on a global scale.
Yet, if economics teaches us anything, it’s that every action incurs a cost — because choosing one path always means forgoing another.
So, what are the hidden costs of the empty space economy?
Putting on our thinking caps, we can unequivocally enumerate at least some of the costs incurred when standard-shaped boxes, produced in the billions, meet irregularly shaped goods — leaving empty space within the box:
1. More ships/trucks: Cargo capacity is limited by either weight or space, but in most cases, space fills up before weight becomes an issue. Inefficient use of space means more ships and trucks are required to transport the same volume of goods that could have fit with better packaging practices.
2. Higher energy consumption: More vehicles on the road or at sea means more energy is required — regardless of whether it comes from fossil fuels or renewable sources. Increased energy demand drives up global energy prices, affecting logistics costs and broader economic systems.
3. Increased labor costs: Unless all transportation becomes fully automated, more vehicles translate into more employees needed to handle, drive, and deliver goods, raising labor costs and stretching human resources.
4. Employee strain and dissatisfaction: Larger, half-empty boxes are often more cumbersome to handle. This unnecessary physical strain can lead to more long-term sick days, higher employee turnover, and overall dissatisfaction, contributing to indirect costs like training replacements or lost productivity.
5. Customer frustration: While avoiding the “cognitive dissonance” trope, many customers report feeling frustrated when receiving half-empty boxes. Beyond environmental concerns, consumers face the added inconvenience of disposing of excess packaging material, which can also strain municipal waste systems.
6. Stifled innovation and lost competitive advantage: Cumulatively, these costs hinder companies from seizing the powerful opportunity to become market leaders in sustainability. In a “lean start-up” mindset, many consumers might willingly accept slightly longer delivery times to support a logistics provider that optimizes space, reduces energy consumption, eases employee strain, and cuts down on waste. By failing to address these inefficiencies, companies miss out on the chance to lower long-term costs and increase shareholder value through a stronger, more sustainable market position.
These costs are incurred regardless of our perceptions, beliefs, or accounting systems. The lack of information preventing a faithful representation of these costs is purely a human failure. All interactions between people, both among themselves and with the environment, generate costs that are not currently measured. Ignoring these costs means missing out on vast opportunities.
Do you see the need to change the base to fix the empty space economy?
I shared these thoughts with a professor in Australia who is a strong critic of the theoretical foundations of economics. To his credit, he responded, stating his disinterest in this approach, as he believes the notion of degrowth is the most effective way to reduce many of the global costs discussed in the previous article. In other words, his argument is that we should simply produce much less.
However, it doesn’t matter whether you advocate for free markets, profit maximization, communism, socialism, capitalism, degrowth, the doughnut economy, the green economy, decoupling, or any other economic, social, or environmental ideal or system — unless any of these actively promote continuous inefficiency, reducing empty space when transporting goods will always be preferable to transporting substantial volumes of an expensive commodity: air in a box, ship, or truck. By continuing to place faith in a system that relies so heavily on what already exists, we will never make meaningful progress.
Our linear minds defend our inefficiencies; we must shift the paradigm behind the empty space economy by adding layers of complexity.
Let me assure you that what was mentioned above is not collectively exhaustive. These are just a few of the costs we incur in our everyday inefficient system, yet reactions to this range from disbelief to open hostility — something I personally attribute to my lack of status. I do not hold a top-ranking position of authority worldwide, nor is my name recognizable within any circle of economic influence. To most people, I’m just some random person stating ideas that aren’t backed by official data or published articles.
But let me guarantee this: regardless of the position, authority, or intelligence of the person who exposes a window to reality, the truth remains unchanged. The absence of data on the actual costs of shipping vast volumes of air worldwide each day does not equate to an absence of costs. Every cost mentioned — and countless others that weren’t — arises from our everyday “business as usual.” This is so whether or not we acknowledge them, measure them, or continuously ignore them because of the self-deceptive myths we’ve grown up with.
Here are two facts that may help you better understand our situation. First, this “random person” was actually inspired to promote complexity literacy by a single sentence from a speech by Harvard Professor Michael E. Porter in Leipzig in 2008, which, at its core, stated that all waste (including empty spaces in logistics) is an economic cost.
Second, consider the Locardian Exchange Principle, best described by Paul Kirk in his seminal Crime Investigation book (1953, p. 4):
“Wherever he steps, whatever he touches, whatever he leaves, even unconsciously, will serve as silent witness against him. Not only his fingerprints or his footprints, but his hair, the fibers from his clothes, the glass he breaks, the tool marks he leaves, the paint he scratches, the blood or semen he deposits or collects — All of these and more bear mute witness against him. This is evidence that does not forget. It is not confused by the excitement of the moment. It is not absent because human witnesses are. It cannot perjure itself; it cannot be wholly absent. Only its interpretation can err. Only human failure to find it, study and understand it, can diminish its value.”
Hence, it is only we who prevent ourselves from understanding the true costs of our collective decisions and interactions. We could sum it up like this:
Every day, we generate vast amounts of costs — not only in logistics but across the countless decisions and interactions we make worldwide. These accumulated costs harm the whole, and only human failure to identify, measure, and act to reduce them allows this inefficiency to persist.
Help the world see these hidden costs. Post a picture of your empty space box, half-empty TEU, or half-empty ship or truck on Instagram with the hashtag #mtspace.
By Dr. Javier Gomez Mata
